Student loans

Biden’s student loan forgiveness now tops $16 billion after fresh wave of approvals

The Biden administration has now approved at least $16 billion in student loan forgiveness, according to the Department of Education, following last week’s announcement of newly approved eligible borrowers.

Biden’s ‘targeted’ student loan forgiveness

The $16 billion in student loan forgiveness approved so far reflects the Biden administration’s “targeted” approach to eliminating student debt. Officials are trying to ease access to existing student loan forgiveness programs by easing program requirements, speeding up approvals and expanding pools of eligible borrowers.

The administration approved $7.8 billion in federal student loan forgiveness for more than 400,000 disabled borrowers under the Total and Permanent Disability Release (TPD) program. Through its TPD discharge initiatives, the Department of Education provides automatic discharges to certain borrowers who receive Social Security disability benefits. Officials also canceled the reinstatement of thousands of federal student loans previously released under the TPD release program due to the failure of some borrowers to return documents related to post-release income monitoring, which was the hallmark. program for years. The Department has now suspended revenue monitoring of TPD post-exit indefinitely while it works to revise the underlying regulations.

The Biden administration also provided $5 billion in student loan forgiveness to 70,000 borrowers through fixes to the Public Service Loan Forgiveness Program (PSLF). Called the “Limited PSLF waiver“, the fix temporarily allows borrowers to get credit for payments made on ineligible loans or under ineligible repayment plans.

The most recent wave of borrowers receiving loan forgiveness are eligible under the Borrower Defense Until Repayment program, which can forgive federal student loan debt for borrowers who have been defrauded by their school . The Department announced last week that it had approved $415 million in borrower defense claims for 16,000 borrowers who attended ITT Technical Institutes, DeVry University, Westwood College, Minnesota School of Business and the ‘Globe University. The department previously approved an additional $1.2 billion in federal student loan forgiveness for borrowers who had attended ITT schools.

More student loan forgiveness is on the way

Administration officials have suggested more student loan forgiveness is coming.

In its statement last week, the Department of Education said it will continue to review and approve additional borrower defense requests submitted by borrowers who have attended the schools in question and can demonstrate that they were victims of academic misconduct.

Ministry officials also said another million borrowers are expected to benefit from the expanded PSLF program this year, both in the form of additional credits and actual loan forgiveness. The limited PSLF waiver program is due to expire on October 31.

Uncertainty persists over widespread student loan cancellation

While student loan advocates have praised the administration’s efforts, some have noted that $16 billion represents a fraction of 1% of outstanding student debt, and targeted relief does little to help. solve what some call a student debt crisis.

“It’s President’s Day and we’re calling [President Biden] for #CancelStudentDebt“, tweeted Representative Ayanna Pressley on Monday. Pressley has been a leading Democrat in Congress calling on Biden to use executive action to erase $50,000 or more in federal student loan debt for each borrower, arguing that existing federal law gives him the power to act without further authorization from Congress.

Administration officials have expressed uncertainty that the president has such authority, and Biden himself — while supporting some form of broad student loan forgiveness — has resisted executive action. to go beyond his administration’s more targeted relief efforts.

Borrower advocates are also pushing the administration to provide more avenues for borrowers to get student loan forgiveness. Earlier this month, a coalition of advocacy organizations called on the Department of Education to establish an ‘IBR waiver’, similar to the PSLF waiver scheme, which would provide a temporary opportunity for millions of borrowers obtain credit for loan forgiveness under income-based repayment. plans; many borrowers have lost crucial months or even years of credit due to the complexity of the current federal loan repayment system, the direction of forbearance and loan servicing irregularities. And consumer protection groups are mounting an increasingly vigorous campaign to convince the Biden administration to act on earlier suggestions that the Department consider easing its broad opposition to the cancellation of federal student loans in bankruptcy. .

So far, Biden officials have made no firm commitments.

Further Reading on Student Loans

One Million Borrowers Could Get Expanded Student Loan Forgiveness Starting This Month, Biden Official Says

Student loan forgiveness: ‘We’re going to win,’ says top Democrat, as poll shows broad support for debt forgiveness

Unraveling Student Loan Forgiveness: Who Qualifies for Three Complicated Programs for Public Service Workers

Is student loan forgiveness taxable in 2022? It is complicated.